Are the FDA's Proposed Budget Cuts Too Drastic?

Senators express concern that agency won't be able to meet its commitments

WASHINGTON -- The FDA's fiscal year 2018 budget request is "abysmal," according to one U.S. Senator.

"The FDA needs more money, not less," said Sen. Patrick Leahy (D-Vt.), who leveled the criticism above. He, along with other members of a subcommittee for the Senate Committee on Appropriations, questioned whether the FDA's new budget request will be enough to speed new and less costly drugs to market, not to mention expand the agency's staff.

During a hearing Tuesday, Leahy argued that, excluding the user fee proposal and the mandatory funding for the 21st Century Cures Act, the proposed budget includes a 34% cut to the agency, with $119 million less for monitoring food safety and $55 million less for medical product safety.

At a time when drug costs are reportedly skyrocketing, Leahy said cutting funding to the agency responsible for approving generics, which help increase competition, seemed problematic.

Others worried about whether the agency would have the staffing to meet its commitments.

Sen. Jon Tester (D-Mont.) pointed to a Congressional Budget Office report that he said estimated that the FDA needs 500 new employees, earning roughly $60,000 a year each.

"How, under this budget, are you going to be able to accomplish that?" Tester asked FDA Commissioner Scott Gottlieb, MD.

The agency will simply have to "do more with less," replied Gottlieb.

The agency's FY 2018 budget request of $5.1 billion (including projected user fees and Cures Act funding) is nearly 10% more than the FY 2017 Continuing Resolution, according to Gottlieb's written testimony.

Despite an overall increase, however, he acknowledged there would be cuts to certain areas, because of the way the budget "prioritizes" user fees.

The new budget calls for a 68% user fee hike -- that's more than $1 billion from drug and diagnostic companies to review their applications, in place of appropriations, according to Genetic Engineering and Biotechnology News.

He asked Gottlieb whether the agency would be able to fulfill its responsibilities based on FY 2017 appropriations.

"We can always do more with more," Gottlieb responded, noting that there are "places to improve operational efficiencies."

Several senators, including Sen. Susan Collins (R-Maine), focused on the FDA's ability to lower drug costs.

She asked whether Congress should revise current laws related to the agency's Risk Evaluation and Mitigation Strategies (REMS) program, noting that some drug companies are exploiting the program in order to delay generic entry to market.

Gottlieb explained that there are at least two ways of delaying generic competition. Some brand-name drug companies have used REMS to block generic drug developers from receiving the samples they need to come up with a generic equivalent, Gottlieb agreed, adding that roughly 1,500 to 3,000 doses of a drug are needed to develop a generic product.

Drug companies can also block generic competition through contracts with distributors that make it more difficult to sell drugs to generic companies at fair market value, he said.

"We can't fully address some of the commercial restriction that prevents [generic companies] from getting access to those doses, but we could in partnership with other agencies," he added.

Gottlieb said the FDA would soon be announcing a public meeting to address this issue.

On lowering healthcare costs, Gottlieb said in his opening remarks that the best way to target this issue is to identify better treatments for expensive diseases.

To that end, he pledged to eliminate the backlog of requests for orphan drug designation in 90 days with the help of an "orphan designation 'SWAT' team" and a new orphan designation review template, although he did not offer any details.

Orphan drug designation is a mechanism for incentivizing the development of drugs and tests to treat, diagnose, and prevent rare diseases -- those that impact fewer than 200,000 people in the U.S. or those drugs where drug companies are unlikely to recover costs, according to the FDA's website.

The FDA is also updating guidance on clinical trial enrichment, adaptive trial designs (using statistical tools to measure safety and efficacy), and clinical evaluation targeting rare disease subsets, particularly those driven by genetic variation, Gottlieb said. The clinical evaluation guidance is expected in the next 6 months, he added.

Merkley also said the new budget would limit the ability for people addicted to opioids to receive treatment.

Since Gottlieb appears to be leading the charge to fight opioid abuse, Merkley asked him what the impact of millions of Americans losing access to healthcare would be for those with opioid abuse problems.

Gottlieb replied that he hadn't been paying attention to the ACA repeal debate, and that his primary focus has been on his FDA responsibilities, including ways to address the crisis and "get ahead of the problem."

Asked whether he had spoken to the 13 Senate members currently writing their own ACA repeal-and-replace legislation, Gottlieb said he had not spoken with "any group" working on this legislation.

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